UNIONS and management at Cyprus Airways (CY) are expected to give their answers today to a Labour Ministry proposal to save the company, but until late last night the unions were far from happy.
Sources close to the mediation told the Cyprus Mail that the unions would probably ask for more time to examine the proposal. “Each of the unions have asked for clarifications and they were expected to be given today (Monday),” said the source. “However, things do not look hopeful.”
Earlier yesterday, pilots’ union (PASIPY) chief Efthymios Liasis told state radio that the proposal completely ignored the issues and was merely asking the unions to make a number of concessions, including major changes to their collective agreements.
“This is something we did not expect,” he said. “We can’t take this proposal to our general assemblies because one hundred per cent it will be rejected.”
Liasis also commented on statements by President Tassos Papadopoulos at the weekend, saying that under EU regulations the government could not bail out the airline, at least unless it was seen that attempts had been made to streamline the state-owned company.
He also said that if sacrifices were not made by sections of the staff, everyone would lose their jobs.
Liasis called the President’s comments counterproductive and untimely. “These comments only serve to worsen the situation. We are very disappointed.”
Costas Demetriou, the had of CY’s biggest union CYNIKA, also criticised Papadopoulos’ comments, particularly regarding the lack of cash to help the company. “I’m going to ask a different question,” Demetriou said. “Where does Cyprus Airways find the money to fill the deficit of Hellas Jet?”
Demetriou was referring to CY’s loss making Athens based subsidiary, which has lost a total of £20 million since it was launched 18 months ago, around £1 million a month.
CY lost £30 million in the first half of this year and prospects for the second half are bleak. The company needs to secure around £25 million in concessions from the unions to maintain viability.
The Labour Ministry proposal, if accepted, could result in around £22 million for the company. Demetriou said if some changes were made to the proposal, it could be possible to reach an agreement. However, he said his members were not willing to accept wage cuts “to pay for the mistakes of management”.
“If some genius on the board decided tomorrow to set up another subsidiary would we be expected to cover the cost of that too?” he asked.
The proposal calls for a suspension in pay rises for 2005 and 2006, axing sick-leave benefits, the reduction of Sunday overtime pay by 50 per cent, a reduction in wages of management personnel and pilots by five per cent for those earning under £30,000 and a reduction of 10 per cent for those earning more than £30,000.
Social insurance contributions should be increased from 3.2 per cent to 6.3 per cent, the proposal said, and the catering menu should be simplified, which would result in being able to reduce staff in that department by 20. It also said the Paphos airport engineering department be integrated with Larnaca and that staff levels there be re-evaluated.
There is also a proposal to axe overnight stays by pilots and crew on eight routes, including Manchester, Birmingham, Amsterdam and Stansted, and to change the ‘official’ place of work to avoid paying staff travel expenses.
Concerning the controversial plan to make 12 pilots redundant, the proposal is now to keep them on as staff under suspension. The pilots union PASIPY had originally rejected this proposal when it was made by the company. The proposal from the Ministry also provides for adequate compensation for any staff that will be made redundant.
The unions have said that, overall, the proposal takes on board more of the management’s demands as defined under the strategic plan to save the airline.
The strategic plan provides for redundancies, pay and benefits cuts, reduction of the fleet, axing routes and outsourcing certain services, but the unions and management have been unable to agree between themselves after months of meetings.
Following a week of intense negotiations between the Labour Ministry and each of the five unions separately, a proposal was finally formulated 10 days ago and given to all sides.
The government reassured last week it had no intention of closing down CY, or of selling it off, although Finance Minister Makis Keravnos said at the weekend that if the proposal was rejected, the survival of the national carrier would be at risk. He called on the unions to show a spirit of compromise.
